Why News Media Companies Are Cutting Deals With AI

News media companies are cutting deals with AI to adapt to technological advances, despite initial resistance, as they navigate the impact of AI on publishing, seeking new revenue streams while balancing the threat to traditional journalism.

Barry Diller organized his fellow media moguls a little over a year ago to oppose artificial intelligence’s advance into the publishing industry. He declared that it was time to “absolutely instigate litigation” against the tech corporations who were attempting to “cannibalize everything” and “scrape our content.”

“If all the world’s information is able to be sucked up in this maw, and then essentially repackaged … there will be no publishing,” he warned at a media conference in April last year.

“If you think that won’t happen,” he added, “you’re just being a fool.”

But last month, Microsoft and OpenAI, the company that created ChatGPT, inked a “strategic partnership and licensing agreement” with Diller’s IAC, which is the owner of several well-known publications, including People, Food & Wine, and InStyle. With this move, the corporation will grant OpenAI access to a portion of its extensive archives in return for links (and potential web traffic) to the original story.

Media businesses are having difficulty figuring out where they belong in the new gold rush as tech companies strive to develop robots that can already write human-like language, summarize lengthy papers, and describe images and videos.

And while some continue to fight—the New York Times, for example, which sued OpenAI for copyright last year—others are attempting to make some uncomfortable accommodations with the very technology that they believe is going to blow them all up.

Diller claimed to see “no contradiction” between the truce this year and the rallying cry from the previous year. In a statement, he stated that IAC will “continue in whatever forum to enforce copyright laws against others” in addition to receiving “direct compensation for our content” (the exact financial conditions are yet unknown).

He was by no means the first head of media to find wiggle room. The Associated Press and OpenAI struck a licensing agreement last summer, which allowed OpenAI access to a portion of the AP’s enormous collection of news items in exchange for the AP “leveraging OpenAI’s technology and product expertise.” This marked the beginning of the industry’s warming toward AI.

The rumors that media corporations will band together to fight Big AI quickly disappeared. Deals were announced with a low-key professionalism.

Semafor unveiled a breaking news feed “supported” by Microsoft, created by AI. Politico and Business Insider are owned by the German publisher Axel Springer, which declared that it will “leverage AI for enhancing content experiences” and “support a sustainable future for journalism.” OpenAI has worked with Le Monde in France and Prisa Media in Spain to deliver news content to ChatGPT in both languages. Chief Executive John Ridding took a Promethean tone when the Financial Times announced its partnership with OpenAI in April.

“As with any transformative technology, there is potential for significant advancements and major challenges,” he said, “but what’s never possible is turning back time.”

OpenAI has declined to disclose the data that powers its systems. However, trillions of sentences that have been taken from the internet and written by someone are used to teach all AI chatbots. The Washington Post reviewed a significant data set in 2023 that Google and Meta used to train its artificial intelligence (AI). The review revealed that the database included a vast quantity of news items from a variety of websites, including Breitbart News and the New York Times, as well as Wikipedia pages, personal blog postings, and religious websites.

However, when chatbots such as OpenAI and others mature as consumer goods, they require more than just language training material. To respond to inquiries from users concerning the globe and current affairs, they require updated information.

Many cautious news organizations began preventing OpenAI from scraping their websites as a first line of defense. The IT giant therefore began drafting agreements to charge for news access.

News Corp. last week announced a multiyear agreement that will enable OpenAI to access its news content to respond to queries from consumers. The agreement may be worth more than $250 million over five years, according to The Wall Street Journal, a News Corp. publication.

It’s a significant figure. However, economist Haaris Mateen told The Post that “the amount that is being paid out is on the lower side” in comparison to “the value that generative AI is bringing to these large tech companies.”

While AI businesses search widely for new material, Mateen, an assistant professor of finance at the University of Houston, adds that journalism has proven to be one of their most valuable tools. If not, “they cannot produce results on current affairs, which encompasses everything from politics to entertainment.”

However, paying the reporters and editors who produce journalism is an expense. According to Mateen, a system where “one side is bearing all the costs of producing news, while all the value is poised to be reaped by the other side” is emerging.

According to some analysts, the media corporations that hurriedly partnered with AI would later come to regret it.

“Licensing deals to train the Automation Death Star to be able to more precisely replicate your work in the future,” journalist Hamilton Nolan wrote last week, “is the equivalent of feeling pleased with yourself that you made five bucks selling your house keys to some burglars.”

It looks like the New York Times is clinging to its house keys. It filed a copyright infringement lawsuit against OpenAI and Microsoft in December, claiming that the two businesses had trained their massive language models on millions of Times stories to outcompete the Times for online traffic and readers. The Times is demanding damages in the “billions of dollars.”

The Times claimed that OpenAI jeopardized its very capacity to profit from its product in documents submitted to a federal court.

“With less revenue, news organizations will have fewer journalists able to dedicate time and resources to important, in-depth stories, which creates a risk that those stories will go untold,” the Times asserted. “The cost to society will be enormous.”

According to OpenAI, “fair use” laws protect its usage of copyright articles.

However, other media outlets are starting to take the Times’ position. The Intercept also filed a copyright infringement lawsuit against OpenAI in February. Eight local and regional newspapers controlled by Alden Global Capital filed a lawsuit last month alleging copyright infringement and reputational harm brought on by OpenAI’s creation of illogical or “hallucinated” responses and linking them to the publications’ content.

Mateen pointed out that the fact that so many media companies are entering into agreements with Open AI may “dilute” the power that the businesses suing it possess. On the other hand, Open AI might be weakening its protection by giving some publishers such large payments: He asserted that “they would be confident enough not to pay anything” if it were truly “fair use.”

Several other significant publishers haven’t sued or collaborated with OpenAI yet.

For example, The Post and the nationwide media group Gannett have chosen to create their artificial intelligence capabilities. Both businesses launched AI-generated, newsroom-reviewed summaries that are appended to articles last week. They are marketing this change as a means of encouraging users to interact more fully with the articles themselves.

William Lewis, the CEO and publisher of Post, gave the impression that he is open to choices. The Post is “in the market for significant AI partnerships,” he stated in a statement, alluding to more general copyright issues.

“We’ve got to get paid for what’s been taken so far, one way or another,” he said.

The licensing agreements, according to OpenAI CEO Sam Altman, are advantageous for both his technology and the caliber of journalism. News Corp.’s CEO referred to his agreement with OpenAI as the “beginning of a beautiful friendship.”

However, according to Jessica Lessin, founder and CEO of the Information, a tech news site, some publishers are hearing echoes of their industry’s excitement over previous waves of digital-era innovations. These innovations included the promise of social media, which lulled media bosses into letting Big Tech replace their relationships with their audience while receiving little in return.

“For as long as I have reported on internet companies, I have watched news leaders try to bend their businesses to the will of Apple, Google, Meta, and more …” Lessin wrote in the Atlantic. “It never works as planned.”

Recently, GreatGameIndia reported that the European Union is cracking down on ChatGPT as the AI model fails to meet GDPR standards. The European Data Protection Board’s report reveals insufficient compliance and ongoing data privacy issues with OpenAI’s attempts to align ChatGPT with EU regulations.